In today’s fast-paced world, delivery services are more important than ever. With the rise of e-commerce and the increasing demand for convenient and fast deliveries, owning a FedEx Ground or Amazon Delivery Service Partners route has become a lucrative business opportunity. But why stop at just one? Expanding your business so you own multiple delivery routes can offer a range of benefits. Here are just five of them.
Diversification
In the world of investing, diversification is a tried-and-true strategy to minimize risks and maximize returns. The same principle can be applied to owning multiple delivery routes. By diversifying your routes, you spread your risks across different locations and industries.
This can help protect your business from unforeseen circumstances like economic downturns, natural disasters, or fluctuations in the businesses who ship with you. For example, a drop in demand for retail deliveries might be offset by a surge in demand in another area.
According to a study published in the International Journal of Production Economics, diversification in the logistics industry can lead to increased operational efficiency and cost savings. By owning multiple routes, you can capitalize on these benefits while reducing the impact of unexpected challenges.
Economies of Scale
As your delivery route business grows, you can achieve economies of scale, leading to reduced costs and increased profits. By owning multiple routes, you can optimize your resources and share costs among the different routes. This can include sharing equipment, vehicles, and personnel, as well as taking advantage of bulk discounts when purchasing supplies or fuel.
There are other common “hacks” like using fuel rewards cards and cash-back credit cards to increase your savings while improving your business credit. If you are disciplined with these cards, they can offer big advantages.
A study published in the Journal of Transport Economics and Policy found that the larger a delivery company is, the more they experience economies of scale, which translates into higher profit margins. By owning multiple delivery routes, you can tap into these benefits, leading to long-term financial success.
Increased Revenue if You Own Multiple Delivery Routes
More FedEx and Amazon Delivery Service Partner routes mean more customers, which ultimately leads to increased revenue. As your business expands, you’ll have access to a larger base, allowing you to capitalize on the growing demand for delivery services. This can also lead to higher revenues.
In a 2020 report by McKinsey & Company, it was estimated that the global parcel delivery market would grow at a compound annual growth rate (CAGR) of 6% between 2020 and 2025. By owning multiple delivery routes, you can take advantage of this with the backing of one of the largest logistics companies in the world.
This can mean purchasing additional routes, expanding the routes you own already, and even spinning off new routes from those. With careful planning, in the end, you can develop something called cross-route synergy.
Cross-Route Synergies
Owning multiple delivery routes can create synergies that benefit your entire operation. For example, if one route experiences a temporary dip in demand, you can redirect resources from that route to support other routes with higher demand. Additionally, having multiple routes can help you better understand regional differences and customer preferences, which can inform your overall business strategies.
Remember, whether you own FedEx Routes or Amazon Delivery Service Partner routes, you are the face of that company on your route. You are marketing yourself, and you can make a difference in how your customers choose to ship, and even where they place orders online. As you own more routes, you create a marketing synergy, along with a service synergy, that you can better service with your increased resources.
These synergies can lead to increased efficiency and better overall performance. In a report published by Deloitte, companies that actively manage their route networks and optimize their operations can achieve up to a 10% reduction in costs and a 5% increase in revenue. By owning multiple delivery routes, you can leverage these synergies to improve your bottom line.
Enhanced Brand Recognition
As your delivery route business expands, your brand recognition will also grow. Owning multiple routes can help establish your business as a reliable and efficient provider of delivery services. This can lead to increased customer loyalty and higher levels of satisfaction, as well as a competitive edge.
Remember, even if you are part of a larger system like FedEx and Amazon, your company is the provider of services on your routes. The more your name and your drivers are recognized and appreciated, the more business customers will send your way.
In fact, according to a 2019 study published in the Journal of Business Research, companies that enjoy strong brand recognition are more likely to experience long-term success and growth. By owning multiple delivery routes, you can cultivate this brand recognition, and fuel your own success.
Whether you are looking for a FedEx Ground Route or want to own an Amazon Delivery Service Partner business, we can help you with purchasing new routes, a new business, and increasing both your profits and your brand footprint. At Route Advisors, we’ll be your partner and help you every step of the way. Contact us today to learn more.